Why are incentives important today,                  isn’t pay enough?Doing more with less, incentives are                ...
Introducing the 5 C’s              How to create incentive programs    with impact and long term results, the RedBalloon w...
Collaboration                             Get buy in from all sides and involve the people at the coalface                ...
Communication                              The best performing programs are clearly communicated,                         ...
Captivation                             Use a variety of tools and techniques to ensure you touch every                   ...
Combination                              Structure your program with a combination of reward goals to                     ...
Celebration                              Have some fun and celebrate to reinforce success,                              im...
Just to recap…Good incentive programs look at the behaviours of all the stakeholders and the rippleeffects those behaviour...
Red Balloon White Paper   The 5 Cs Of Incentives
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Red Balloon White Paper The 5 Cs Of Incentives

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Red Balloon White Paper The 5 Cs Of Incentives

  1. 1. Why are incentives important today, isn’t pay enough?Doing more with less, incentives are Engaged employees deliver bettermore relevant than ever bottom line resultsMore and more, the conversations RedBalloon Gallup statistics show that businesses with a higherconsultants have with clients are sales or performance than average engagement score deliver 50% lowerrelated. Businesses are asking the questions: How can turnover, 56% higher than average customer loyalty,we sell more? Win more customers? Strengthen our 38% above average productivity and 27% morerelationships and gain market share? How can we profitability. Incentive programs are strategy, not nice-improve profitability? to-haves.The underlying question for businesses in challenging Whilst this paper focuses on internal incentiveeconomic times is; ‘How do we do more with less?’ programs the same principles apply to building an effective customer program as those created for yourTougher times, squeezed margins, fewer resources for employees.the same results and the need to be perceived to bereigning in any non-essential spend make any non-cashincentive program seem vulnerable to the untrained eye. Get your clients to willingly shout about your brandThe perception that incentives are a ‘nice to have’ couldnot be further from the truth. Effective incentives deliver In the same way an engaged employee appliesobvious ROI because the programs pay for themselves discretionary effort to the business, an engaged clientwhen people hit their targets and are busy creating long will become a brand advocate.term value. According to a global Nielsen survey2 of 26,486The basis of most incentive programs is very simple - do Internet users in 47 markets, ‘consumerthis and get this. Incentives are proven to increase team recommendations’ are the most credible form ofperformance by up to 44% and individual performance advertising among 78% of the study’s respondents.by 25%. 1 This obviously has a direct influence on the Given the opportunity, brand advocates willinglybottom line. recommend the business in favour to other people as though it is second nature.There is another dimension (even in tough times) toconsider and that is the effect the program has on A non-cash incentive or reward program is not aemployee and client engagement. A program that works replacement for sales commission. In the same waywill not only achieve short term sales, but will be an the money that its costs to offer a discount or priceinspiration and an investment in the future. cut can be better invested to enhance the long term customer relationship and the chances that your customers will refer you to others. This white paper unpacks the mystery of building a successful incentive program into five key elements and demonstrates that process driven creativity is what really delivers results. RedBalloon’s domain is all about creating a strategy that can be easily applied and maximises returns. RedBalloon consultants work with clients imparting their experience to achieve extraordinary sales performance, profit and in doing so establishing the foundations for unbreakable relationships through engagement. 2 Page 2 of 9
  2. 2. Introducing the 5 C’s How to create incentive programs with impact and long term results, the RedBalloon way. Collaboration. Understanding and involving your audience to ensure that there is buy-in to your big picture is easy – and makes getting traction easier Communication Making sure everyone knows what they need to do, what they are playing for and how they are progressing – then repeat on loop Captivation Using language and prizes that inspire everyone no matter their age, sex or status – everyone can be a hero Combination Getting the structure and reward opportunities right for the business and right for the players – a program that is greater than the sum of its parts Celebration Maximise the ROI with an injection of fun and improve performance, engagement and the bottom line – story telling is what makes it work 3 Page 3 of 9
  3. 3. Collaboration Get buy in from all sides and involve the people at the coalface in the design of your program from day one.With your overall company strategy in mind, set program Understanding why people work, gives a better insightgoals that are both achievable and measurable and into how they like to be acknowledged. People want toidentify key areas where your employees can make a be acknowledged in different ways, so give themdifference. Research your audience and understand choice such as having rewards that enable thewhat life is like in the field. Get into your customers recipient to spend time with their family, help themshoes and be present to their decision-making progress their career development, or give them theprocesses. chance to experience what they love the most but never have time for. TIP: Simplicity of message Don’t try to solve 800 problems with one program, choose a few behaviours you want to Input from the ground up leads to influence and create long lasting change. innovationNegotiated targets and rewards criteria are more likely Here’s a simple example of collaboration from anotherto be realistic and relevant; the people in your business sphere but it demonstrates why the participantthat talk to clients everyday of the week, the ones who perspective can be so valuable in designing aare the business day in, day out, are the best barometer solution. Company A decides it will save a fewfor your world. James Wright, Account Director at thousand dollars a year by ceasing to buy chocolateRedBalloon stresses to “know your people. Rather than biscuits for staff. Uproar ensues. Company B asksgoing top down, go bottom up. Understand the individual employees for ideas as to how they might shave a fewskills and interests of the team and translate them into a thousand dollars off costs, staff volunteer to give upstrategy that aligns with your business goals.” their biscuits and take it turns to bake instead; cash saved, relationships strengthened. Give yourSet the rules of the game and stick to them employees the chance to work it out for themselves and you’ll find you get some pretty incredible results.Is it too easy to make budget or hit targets? Shouldthresholds be higher? Does the program deliver A major factor that has contributed to RedBalloon’sprofitable business and maximise the value of Employee Engagement score of 97%3, and it’s rankingcustomers? How much flexibility do you have if the as one of the top ten Great Places To Work4 inmarket gets tougher? These are all relevant questions Australia, is collaboration within the organisation.to be asking, and they apply in all economic climates not Communicating the feeling of ‘we’re all in thisjust in a down market. together’ will strengthen teams with a strong mateship culture, intensifying collaboration and resulting in Whilst the budget for your incentives will be set by the greater efficiency and innovation. business with return on investment in mind, think. Naomi Simson, RedBalloon CEO says “transparency carefully about what is on offer for each individual. Not only do you need input from your people on the rewards and accessibility, like ensuring free flow of unfiltered they want to strive for, you need to make sure the information allows individuals to feel empowered to perceived value of your rewards amounts to the effort make decisions. It is a question of having a shared and contribution made by those involved. Use facilitated sense of purpose; people thrive when they feel part of workshops, surveys and market research to identify the something.“ appropriate opportunities for reward, possible behaviour changes and the right kind of prizes. Agreeing to the rules of the game before you start playing, and sticking to them, as much as possible TIP: Make it achievable for all means you’ll achieve better results and everyone will Don’t just recognise the top performers - have more fun playing. include the middle 50% who are capable of achieving outstanding results too. 4 Page 4 of 9
  4. 4. Communication The best performing programs are clearly communicated, completely inclusive and interactive.RedBalloon clients are typically spending between Communications Checklist10-25% of their program budget on communications; notjust to launch activities but sustained efforts to report, 1. Have a planreinforce and explain again the nature of the game they 2. Regular reminders of the what, when and howare asking employees and customers to play. 3. Make it interactive 4. Do not rely on e-mail – use a range of mediums TIP: Launch it - Live it - Talk about it 5. Keep it fun! A program must have a life and personality if it is going to gain traction with your target group. You’ve got to start the fire, watch it burn and Responding quickly to pockets of continually stoke it. disengagementTools to bring your program alive One RedBalloon client was recently having specific issues around ‘buy-in’ to their program. TheEven as an online business, RedBalloon is committed to excitement that had gathered pace in the rest of themaximising the physicality of client programs in their business was not evident in one particular site andworkplaces by equipping managers and team leaders intervention was required. RedBalloon’s internalwith the tools to bring things to life. creative agency worked with the client’s staff and combined personal letters, on-site posters, all-staff e-One size does not fit all, and often segmenting groups of mails and a series of explanatory workshops toemployees or customers is required to ensure everyone engage with a specific demographic and witnessedis on-board. response rates more than doubled over a four week period.As well as from the more traditional communicationoptions such as emails, posters, post-its, videos, TIP: Keep it consistentcalendars we recommend taking advantage of all media People get disconcerted when you changeoptions, the majority of which are low cost and usually the program and the rules too oftenalready in place. Leadership’s influence on the success ofAt RedBalloon we take advantage of all options your programavailable: The company blog is a forum for everyone to share their stories throughout the day, from positive client There is not always the budget available to deliver feedback, interesting conversations to new actual rewards everyday or every week, but with business wins. effective two-way communication the perception of A flat screen overhangs the reception desk success can be intensified, performance enhanced displaying the number of people the business has and engagement improved. given an experience to, in real time. (Plus fun photos of staff on experiences) Gallup research suggests that we forget a thank-you Team Huddles happen every Monday and news is just seven days after it’s given and Hays Group cascaded throughout the business, if something research shows that 70% of engagement is great has happened everyone hears about it. determined by the direct manager. At monthly company meetings, the CEO Naomi shares individual good news stories and also reads TIP: Authenticity out the monthly peer to peer nominations for those Be authentic and honest about why you are who have demonstrated the RedBalloon values. running the program and about your objectives. 5 Page 5 of 9
  5. 5. Captivation Use a variety of tools and techniques to ensure you touch every participant of a program regularly.Find a metric that turns your people on Experiences as rewards are immediately more impactful than cash. This is largely due to the fact theyThe Sales team get that they have to hit their revenue are something we would not normally spend ournumbers. The contact centre get that it is all about disposable income on whereas cash gets lost in bankgetting call handling times down and delivering accounts or eaten up by credit cards and quicklyexceptional service. Be creative and come up with some forgotten.big picture numbers that get your people excited. TIP: Give people choice in rewards Keep the rewards range as broad asWhat’s your B.H.A.G? possible. Not everyone wants to skydive! You’ll be surprised at the number ofAt RedBalloon our ‘Big Hairy Audacious Goal’ is to participants who want the opportunity tochange gifting in Australia and New Zealand forever and enjoy their reward with a loved one, friend,when we’ve delivered 2.2m experiences we will have family or even colleagues.done it! The big screen in the office tells us how closewe are getting and everyone no matter what they aredoing at work knows they are contributing to this end. Make dreams come true How many more customers do you want to win? Incentives and reward programs are as much about How many widgets could you sell? acknowledgement as they are about prizes or How many on-time deliveries can you achieve? commissions. The Wishlist feature on the RedBalloon program is one of the most powerful ways to captureTelstra Business recently saw an uplift of 10% in sales the individual’s imagination. Each person creates aas a result of their RedBalloon incentive program. Wishlist of their dream experiences from RedBalloon’sGeorgia Lee, General Manager of Sales Programs at selection of 2,500. They are updated every time theyTelstra Business said “it created excitement because it receive points (incentives) from their manager, tellingwas something different that everybody could relate to. them how much closer they are to achieving theirIt made the actual campaign about Telstra Broadband dream. Managers also have the visibility of knowingstand out amongst many other internal campaigns going their employees Wishlists and being able to giveon at the same time”. specific rewards for the experience of their dreams.Another client program recently delivered 1,000 extra The role of the Executive Sponsorcustomers, which equated to a 25% uplift in trade salesand sending over three quarters of their sales team on The Executive Sponsor or Senior Level figure isexperiences. crucial for any incentive program to achieve maximum results. It is this person who needs to launch theWhy experiences as rewards? program, defend the budget at the board table and be the visionary for its impact across the business.RedBalloon use experiences as the prizes in ourprograms because they are proven to work best and Recently to launch a program, RedBalloon filmed twothey are more cost effective. As a comparison, it takes Senior Execs from a Financial Services organisationan increase of up to 8% of an employee’s salary to having a helicopter lesson and flying a Tigermoth.change behaviour and only a cost of 4% of the They were just doing something they had alwaysemployee’s salary if you are using non-cash incentives wanted to do and having fun, at the same timeas the lever to influence5. delivering an important message to their people. It’s stories like these that entices others in the business to keep adding to their wishlists and striving to achieve more. 6 Page 6 of 9
  6. 6. Combination Structure your program with a combination of reward goals to engage with as many participants as possible.Playing with your employees Playing with your customersThere are four central combinations available with any When we apply the concept of combination to ainternal incentive program, Structured or Ad hoc; and customer incentive program the central tenants areIndividual or Team. Instant gratification VS Earned gratification; and Something for everyone VS Something for a few.The best performing programs include elements of allfour because they are capable of engaging with as many The mix between the four depends on a number ofof the potential players as possible by offering multiple factors:ways to win. 1. Purchase price and expected frequencySTRUCTURED ADHOC 2. Customer demographics 3. Budget constraints and desired ROI 4. Relationship with audience Revenue based  CEO special targets each quarter recognition Whether your mechanic is a gift with purchase, new / annually for  Deal of the week in business referral program or game of chance, the age individuals and the each state old question “what’s in it for me?” needs to have a team  Peer to Peer support compelling answer. Number of decision  Largest/most maker presentations profitable client to The point about combination, without complicating the delivered date rules of the game or muddling the communication is New clients signed  Most creative pitch that it provides for a number of different games within Number of service or presentation the game; there will always be some good news contracts renewed  Best customer stories to share across the team or channel to keep it service fresh and the momentum going. RedBalloon ran a promotion through a client’sMix it up distributor channel recently where every invoice for a specific product was entered into a monthly draw forBy offer a variety of individual and team prizes you can three months. By the end of four weeks the client’skeep employees engaged in the incentive. We play this sales team had real winners to talk to their customersat RedBalloon across our non-cash incentives by mixing about and drive more unit sales. At the end of theup the experiences delivered through our points quarter every invoice went into a grand draw with aprogram, with tactical milestones along the way. fantastic story to replay to the whole channel once the winner has been of their experience of a lifetime.For example every time someone writes the largestinvoice ever, we celebrate with French champagne forthe whole business – it is team effort after all! This type TIP: Instant wins workof social recognition is just as important as the tangible A guaranteed reward or a handsome instantreward on offer. Every few months there is an win in relation to the products value is theopportunity for each team to celebrate achievements most desirable consumer incentive.together, and each trimester and annually we share in acompany wide experience. 7 Page 7 of 9
  7. 7. Celebration Have some fun and celebrate to reinforce success, improve engagement and to maximise the ROIMaximising the ROI and performance with an injection A few ideas to considerof fun allows you to deliver an incentive program thatticks all the performance improvement boxes and At RedBalloon we are continually coming up withenhances employee and client engagement. exciting new ideas to support our client programs and here is just a few of these.You have invested in stories – so tell them,again and again  Landed helicopters outside a conference in the Barossa Valley and whisked two unsuspectingAs human beings we replicate the behaviours of those employees off for adventure to get the storiesaround us that are applauded and receive praise. It’s startedpretty simple stuff really and it began in the playgroundat school.  Built SMS into a points program so that every time the sales team reported closing a deal theirIf someone does something good and is made a hero of Director responded with an uplifting messagethen we are likely to copy their behaviours so we can bea hero too.  Added landing pages into program websites where employees talk about their RedBalloonBy developing an incentive program and a experiences and the fun they have hadcommunications strategy to support it, that captures andreplays hero like behaviours to a wider audience by  For Macquarie University we created a mini-celebrating their achievements you’ll ensure that your experience Expo with sword fighting, sushiinvestment is maximised. making, massaging, circus skills training and a whole lot more to bring a program to life for overUsing RedBalloon’s range of experiences with 100 managerssomething that appeals to everyone as your rewards orprizes is a double whammy for ROI. People love to share  Abbott Pharmaceuticals use ‘Roving Reporters’ totheir stories about they do with their rewards and will collect success stories and experienceshare the reasons why they were rewarded too. testimonials and replay them across the business.Story telling is how we learn about each other and who  Cummins Power use Wishlist and redemptionwe are, so we develop stronger ties and greater levels reports to create email communications thatof engagement. inspire extra sales efforts at the end of the period. TIP: Use the power of conversation  Ericsson runs roadshows to communicate the It’s not what you tell them, but what they tell rewards on offer in their Excel program to make you that propels your program. What people in the link between discretionary effort and having a the corridors laugh about and compare with good time. each other – experiences they did on the weekend, hero boards, photos, and stories. TIP: Go for it! Don’t be afraid to think big and try something new. Remember, if you do what you have always done, you’ll get the results you’ve have always got. Most importantly have fun in the process! 8 Page 8 of 9
  8. 8. Just to recap…Good incentive programs look at the behaviours of all the stakeholders and the rippleeffects those behaviours have. Good incentives seek to permanently change behaviour towin market share, improve processes or relationships with lasting impact through theactivity chain.The programs that RedBalloon support our clients with, are always designed with the longterm relationship in mind, to add value rather than displace it and contribute to sustainablebusiness growth.Businesses in the know are using non-financial incentive and reward programs as thecornerstone of their ‘do more with less’ strategies. A recent study by the University ofChicago6 showed non-cash incentives were 25% more powerful at boosting performancethan cash incentives.The process RedBalloon employs to deliver incentive programs includes facilitatedworkshops to aide program design, integrated communication strategies aligned to clientculture and regular review and refresh of activity.About RedBalloon for CorporateRedBalloon Corporate transforms workplace cultures through Employee Engagement,Incentive and Reward and Recognition Programs and Sales Promotions. UsingRedBalloon’s unique resource of over 2500 amazing experiences in Australia and NewZealand we specialise in creating attachments between employees and their employerand winning clients more sales and new customers.Contact us for more information and case studies:AUSTRALIA 1300 850 944 query@redballoon.com.au redballoon.com.au/corporateNEW ZEALAND 0800 555 029 query@redballoon.co.nz redballoon.co.nz/corporate References 1. Stolovich, H, Clark R, & Condly, S. Incentives, Rewards and Workplace Motivation (2002) Society of Incentive & Travel Executives Research Foundation. Sourced from Iloverewards.com Nov 2008 2. Word of Mouth the Most Powerful Selling Tool, Nielson Online Global Consumer Study (April 2007) 3. International Human Capital experts Hewitt Associates awarded RedBalloon with an engagement score of 97% in 2008, the average score in Australian businesses is 54%. 4. The Great Places To Work Institute survey involved 220 Australian businesses. RedBalloon was named the ninth Best Place to Work in Australia in April 2008. 5. Jeffrey, S Dr. (2004) The Benefits of Tangible Non – Monetary Incentives Study, University of Waterloo 6. University of Chicago study, 2004 sourced from Increase Employee Performance by Meeting Psychic Income Needs, www.globoforce.com Nov 2008 9 Page 9 of 9

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